Net Income (Loss) per Common Share

9 Months Ended

Sep. 30, 2021

Net Income (Loss) per Common Share

Net Income (Loss) per Common Share

Note 12. Net Income (Loss) per Common Share

The Company uses the two-class method to compute net income per common share during periods the Company realizes net income and has securities outstanding (redeemable convertible preferred stock) that entitle the holder to participate in dividends and earnings of the Company. In addition, the Company analyzes the potential dilutive effect of outstanding redeemable convertible preferred stock under the "if-converted" method when calculating diluted earnings per share and reports the more dilutive of the approaches (two class or "if-converted"). The two-class method is not applicable during periods with a net loss, as the holders of the redeemable convertible preferred stock have no obligation to fund losses.

The Company also analyzes the potential dilutive effect of stock options, restricted stock units, warrants and shares underlying future tranche rights under the treasury stock method (as applicable), during periods of income, or during periods in which income is recognized related to changes in fair value of its liability-classified securities.

For the nine months ended September 30, 2021 and 2020, the Company used the two-class method to compute net income per common share. Under this method, net income is reduced by the amount of any dividends earned and the accretion of redeemable convertible preferred stock to its redemption value, if any, during the period. The remaining earnings (undistributed earnings) are allocated to common stock and each series of redeemable convertible preferred stock to the extent that each preferred security may share in earnings as if all the earnings for the period had been distributed. The total earnings allocated to common stock is then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share.

Details in the computation of basic and diluted net income (loss) per common share were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
($ in thousands except per share data)		2021		2020		2021		2020
Net (loss) income per share — Basic:
Net (loss) income	$	(5,965)	$	(20,552)	$	102,210	$	(35,961)
Less: Undistributed earnings to preferred stockholders		—		—		(1,636)		—
Net (loss) income attributable to common stockholders	$	(5,965)	$	(20,552)	$	100,574	$	(35,961)
Net (loss) income attributable to common stockholders	$	(5,965)	$	(20,552)	$	100,574	$	(35,961)
Denominator for basic net (loss) income per share		52,740		35,091		47,990		32,999
Basic net (loss) income per common share	$	(0.11)	$	(0.59)	$	2.10	$	(1.09)
Net (loss) income per share — Diluted:
Net (loss) income	$	(5,965)	$	(20,552)	$	102,210	$	(35,961)
Less: Warrant revaluation gain applicable to dilutive warrants		—		—		(6,983)		—
Less: Future tranche right revaluation gain applicable to dilutive future tranche rights		—		—		(118,803)
Less: Undistributed earnings to preferred stockholders		—		—		—		—
Numerator for diluted net (loss) income per share	$	(5,965)	$	(20,552)	$	(23,576)	$	(35,961)
Denominator for basic net income per share		52,740		35,091		47,990		32,999
Plus: Incremental shares underlying “in the money” warrants outstanding		—		—		223		—
Plus: Incremental shares underlying “in the money” future tranche rights outstanding		—		—		3,400
Denominator for diluted net (loss) income per share		52,740		35,091		51,613		32,999
Diluted net (loss) income per common share	$	(0.11)	$	(0.59)	$	(0.46)	$	(1.09)

Note 12. Net Income (Loss) per Common Share (Continued)

Total antidilutive securities excluded from the calculation of diluted net loss per share for the three and nine months ended September 30, 2021 and 2020 were as follows:

(in thousands)	2021	2020	2021	2020
Stock options	5,329	5,111	5,329	5,111
Restricted stock units	576	914	576	914
Common stock warrants	8,732	12,917	8,732	12,917
Convertible preferred stock	—	2,369	—	2,369
Future tranche rights	—	54,588	—	54,588
Total	14,637	75,899	14,637	75,899